• Fed raises interest rate by 75 basis points as expected.
• US dollar weakens as FOMC says will take into account the cumulative tightening.
• EUR/USD gains momentum, above 0.9950 could test parity.

The EUR/USD rose following the Fed’s decision to raise interest rates by 75 basis points as expected as the US dollar tumbled across the board. The pair rose from 0.9970 to as high as 0.9945 in the minutes after the FOMC statement.

The FOMC said it “will take cumulative tightening of monetary policy, the lags with which monetary policy affects.” It also said it need to keep raising until rates are “sufficiently restrictive.” Now market participants await the post-meeting press conference (18:30 GMT).

The signals from the Fed pushed US yields to the downside and sent the greenback sliding. The US Dollar Index turned negative to test Monday lows while gold and silver jumped.

At the time of writing, the EUR/USD is moving higher trading at two-day highs above 0.9950. The next strong barrier is located around the parity area, followed by 1.0055 and then the last week's high at 1.0090 will come into attention. On the flip side, the immediate support now stands at 0.9915. A break under 0.9850 would likely trigger more losses.

Technical levels